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D.C. mayor to charge $1 rent to attract retailers to St. Elizabeths campus

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Local,DC,Eric P. Newcomer,Vincent Gray

To lure businesses to the St. Elizabeths campus in Southeast Washington, Mayor Vincent Gray announced that the city will be offering space there on a "pop-up" basis -- for $1.

"Pop-ups are a concept that will bring a lot of companies at virtually no cost to themselves," Gray told reporters Wednesday. "We want them to come; we want them to be part of this."

The District has already poured millions into the St. Elizabeths property, which lies east of the Anacostia River. The city plans to spend $113.5 million on the site's infrastructure through 2016, the mayor said Wednesday.

Developing the enormous mixed-use property was always going to be a drawn-out process, but the decision to significantly subsidize the cost of doing business on the property is meant to be a pragmatic short-term stopgap, bringing business to a property that some companies might otherwise shy away from.

East vs. west
The St. Elizabeths property is essentially divided in half -- the west side is controlled by the federal government, where construction of a new 500,000-square-foot Coast Guard headquarters is under way.
District leaders hope to draw the approximately 3,700 Coast Guard employees on the West Campus onto the city-controlled East Campus by creating a thriving marketplace there.
Eventually, the headquarters for the Department of Homeland Security is expected to move to the west side of the property.

The pop-up space, which the District is calling the Gateway Pavilion, will host a 16,300-square-foot open-air market, a covered pedestrian walkway, space for sinks and flexible spaces for vendors.

Brett Theodos, a researcher at the Urban Institute, said that only a limited range of businesses would be attracted to the site. Also, he said, many businesses that require expensive upfront costs would avoid the facility.

"There's the potential for existing businesses to just move up the road in a way that doesn't grow the net commercial offerings," he warned. But, he said, free rent "may be enough to tip the scales" and attract new vendors across the river.

"Gray's plan appears to be an innovative way to make use of a space that would otherwise go unoccupied in the short term," said Max Farrow, a spokesman for the DC Chamber of Commerce. "While we applaud the new initiative, the chamber feels that in the long term, the District still has a long way to go in terms of making our city attractive to new businesses."

The mayor said that eventually businesses would have to pay to stay on the property.

"That dollar [rent] will stop at a point," Gray said. "We'll know when the time comes. We'll tell when you start to get comfortable over here."

City planners are hoping to lure federal employees over to the east side of the property. They've even considered the length typically allowed for lunch at the Coast Guard (30 minutes), measured the time it takes to walk from the West Campus to the east campus (8 minutes) and lobbied the federal government to offer a shuttle to make it easier for employees to buy lunch at the East Campus facility.

The District is evaluating proposals from three businesses to anchor the East Campus: Microsoft Corp., Citelum USA and SmartBIM/Treasury Advisory Services.

enewcomer@washingtonexaminer.com

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